Sugar Climbs With Grains Before May Futures Expiry; Cocoa Falls

Sugar climbed for a fourth day in New York, the longest winning streak since March 7, gaining support from rising grain prices just before the expiry of the May futures contract. Cocoa fell.

Corn futures extended yesterday’s 6.5 percent advance, the biggest in 10 months, after a government report showed cold, wet weather delayed planting in the U.S., the world’s biggest exporter. The May raw sugar futures on ICE Futures U.S. expire today and the delivery will be published tomorrow. The May futures were trading at a premium of 0.01 cent a pound to the July contracts, down from 0.04 cent yesterday and reversing a discount of 0.06 cent at the end of last week.

Sugar’s climb yesterday “looks attributable to the weak dollar and the sharp spike in corn,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report e- mailed yesterday. “We do need to see some follow-through buying over the next two sessions before giving any more bullish thought to the situation.”

Raw sugar for delivery in July gained 1 percent to 17.62 cents a pound by 6:31 a.m. on ICE in New York. Futures trading volumes were 41 percent below the average for the past 100 days for this time of day, according to data compiled by Bloomoberg. White, or refined, sugar for delivery in August rose 1 percent to $506.50 a metric ton on NYSE Liffe in London. The U.S. dollar fell 0.4 percent yesterday against a basket of six major counterparts.

Brazil’s center south, the main growing region of the world’s biggest sugar producer, will produce an all-time high 35.5 million tons of the sweetener this year, Unica estimated yesterday. The record output will come even as millers direct more of the raw material sugar cane to making ethanol, the industry group said. Both cane and corn are used to make the biofuel.

Ethanol Use

“Expectations for Brazil are still for higher production, despite higher use for ethanol,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by e-mail. “The price remains stuck below 18, so the supply situation continues to be ample,” he said, referring to the price of raw sugar in cents per pound.

Cocoa for July delivery fell 0.6 percent to $2,322 a ton in New York. Cocoa for delivery the same month declined 0.6 percent to 1,517 pounds ($2,351) a ton in London.

Arabica coffee futures for July delivery gained 0.3 percent to $1.342 a pound on ICE. Robusta coffee futures for delivery in July slid 0.5 percent to $1,999 a ton on NYSE Liffe.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.

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